Each partner’s share of partnership income, deductions, etc. is usually based on his or her ownership percentage.
In some cases, a special allocation is needed to distribute these amounts differently, as the Partnership needs.
Entering the allocation amounts or percentages for each partner.
Go to the View menu in TurboTax Business and Select Forms.
In the "Forms in My Return" section on the left, select the Schedule K-1 Worksheet.
In the Partner Information section of the Schedule K-1 Worksheet, set the Special Allocations for each partner. Each set of 1-4 and A-D is for the particular partner listed on the on the viewable K-1 worksheet. You will never enter information for more than one partner on this form without scrolling to the next copy.
( If the scroll bar is not working, you will want to click in a field on the form such as field D. This will allow the scroll bar to work.)
Verifying the combined allocated amounts or percentages match the appropriate Partnership totals.
If there is a ratio entered, the ratios of all partners combined must total 100.00%.
If there is an amount entered, the total amount must equal the “Amount shown on Schedule K” for the relative field on the Sch K Reconciliation Report.
Activating Special Allocations on the 1065.
Select Form 1065 p4-5 in the "Forms in My Return" section on the left.
Allocate the line items in the Schedule K section for the Special Allocation you would like to use for that item.
(Make sure the numbers and/or letters match up for what you would like to allocate.)
Check the Schedule K-1’s for each partner to verify the numbers are correct.
Run an error check to make sure there are no errors on the return.